2020 (6) TMI 651 - AT - Insolvency and Bankruptcy

Approval of Resolution Plan - CIRP process - HELD THAT - It is a settled law that the 'Resolution Applicant' has no right for re-negotiation or further negotiation. After submission of the 'Resolution Plan', if it is found in order and in accordance with Section 30(2), it is required to be placed before the 'Committee of Creditors. The process of evaluation is guided by the said criteria as set out in the 'Request for Resolution Plan'. If the evaluation criteria suggest that only top three 'Resolution Applicants' should be negotiated, the Appellant who ranked 6th among the 'Resolution Applicants' cannot have any right to participate for re-negotiation over the decision of the 'Committee of Creditors'. In COMMITTEE OF CREDITORS OF ESSAR STEEL INDIA LIMITED THROUGH AUTHORISED SIGNATORY VERSUS SATISH KUMAR GUPTA OTHERS 2019 (11) TMI 731 - SUPREME COURT , the Hon'ble Supreme Court held that the commercial aspects of a 'Resolution Plan', its viability or otherwise, and, distribution of proceeds amongst stakeholders, were to be looked only by the 'Committee of Creditors' who are competent to go through all relevant aspects. Therefore, this Appellate Tribunal cannot deliberate on such issue. In the present case, as no ground has been made out in terms of Section 61(3), we are not inclined to interfere with the 'Resolution Plan' of 3rd Respondent duly approved by the Adjudicating Authority - Appeal dismissed.

Summary

Issues:
Challenge to approval of Resolution Plan by Adjudicating Authority.

Analysis:
The Appellant, a Resolution Applicant, challenged the approval of the Resolution Plan submitted by the 3rd Respondent in the Corporate Insolvency Resolution Process of the Corporate Debtor. The Appellant claimed that despite ranking 6th among the Resolution Applicants, it sought to negotiate and enhance its bid after being denied an opportunity to present before the Committee of Creditors. The Appellant contended that the evaluation process lacked transparency and the Resolution Professional did not consider its revised proposal adequately. The Appellant argued that a revised plan should be accepted if it surpasses the amount offered by the top-ranked Resolution Applicant in the interest of stakeholders.

The Resolution Professional defended the process, stating that the Appellant's delayed Expression of Interest was considered due to its potential and financial capability. The Resolution Plan evaluation criteria specified negotiation only with the top three Resolution Applicants, where the Appellant ranked 6th. The Resolution Professional and the 3rd Respondent argued against the Appellant's right to renegotiate post-submission of the Resolution Plan, citing settled law that Resolution Applicants have no such right.

The Tribunal referenced the Supreme Court's decision in Essar Steel India Ltd. v. Satish Kumar Gupta, emphasizing the Committee of Creditors' competence in evaluating commercial aspects of a Resolution Plan. The Tribunal highlighted the limited grounds for challenging an approved Resolution Plan under Section 61(3) of the law, which were not met in this case. Consequently, the Tribunal dismissed both appeals, upholding the approval of the Resolution Plan submitted by the 3rd Respondent. No costs were awarded in the matter.